Acute lung injury (ALI) is a major health problem that is characterized by exudation of fluid into the alveoli and release of proinflammatory cytokines. It is frequently the result of a systemic inflammatory process including sepsis, trauma, hemorrhage and pancreatitis. We have used the cecal ligation and puncture (CLP) model of sepsis to study the importance of the cell surface molecule CD40 in development of ALI in mice. We now report that CLP produces lung capillary leak, interstitial infiltration of inflammatory cells and 30 percent morality at 18 hours. Matched mice with deletion of CD40 have marked attenuation of lung inflammation and 0 percent mortality at 18 hours. CD40 mutation also markedly attenuates production of anti-inflammatory IL-10 and proinflammatory IL-6 and IL-12 in both serum and broncho-alveolar lavage (BAL) after CLP. CD40 knockout (KO) mice also have a reduction of pro-inflammatory NfkB and anti-inflammatory C/EBPB and STAT3 transcription factors after CLP in both the lung and liver. Although capable of attenuating both pro and antiinflammatory signals, attenuation of inflammation predominates in mice deficient in CD40. Mice with a conditional mutation of STAT3 only in macrophages and NK cells (STAT3 KO) have a marked increase in cell surface CD40 expression on alveolar macrophages (AM) but not lymphocytes at baseline. These mice have a more severe ALI after sublethal CLP as evidenced by histologic appearance. This is associated with a marked increase in IL-6, IL-10 and IL-12 production in serum and BAL. Conversely, STAT3 wild type mice had no alterations in either lung histology or cytokine levels after CLP induced sepsis. These data raise the possibility that AM CD40 expression is a central regulator of lung injury during sepsis. We hypothesize that development of ALI depends upon the balance between pro and anti-inflammatory transcription factors. By controlling induction of these transcription factors, AM expression of CD40 is necessary to fully develop ALI during sepsis. We propose to determine the ability of CD40 to modulate pro and anti-inflammatory transcription factor induction in macrophages (STATI and STAT3 respectively) after CLP induced sepsis, better define the role of STAT1 and STAT3 in feedback regulation of CD40 expression and define the utility of CD40 blocking agents for the treatment of sepsis induced ALI.